The $139.2bn (€101bn) California State Teachers’ Retirement System (CalSTRS), the second largest US public pension fund, has adopted a policy calling for investee companies to report on their political contributions to shareholders every year.
The policy was adopted at the fund’s Investment Committee meeting on November 3. It formalises the fund’s longstanding and emphasizes the importance of board accountability. The fund had been asked to put it in place by California State Treasurer Bill Lockyer in May.
The new policy calls for companies’ boards to require management to provide information regarding political expenditures annually – and to make that information “readily accessible” to shareholders.
“Transparency in this area has been a longstanding concern for CalSTRS and remains a key part of ourongoing efforts to elicit more disclosure and accountability,” said CalSTRS Investment Committee Chair Harry Keiley.
“Given that we’re a long-term shareholder, CalSTRS wants to make sure political contributions will not have a deleterious effect on the long-term value of our portfolio companies.”
CalSTRS said the 2010 Supreme Court ‘Citizens United’ judgment – which protected corporate political contributions – had heightened interest in such disclosures.
Locker said the ruling stressed the importance of transparency to investors, but shifted to shareholders the burden of enforcing disclosure and accountability. “I’m pleased CalSTRS has decided to accept that responsibility,” he said. CalSTRS announcement